Correlation Between Wrapped EETH and Toncoin
Can any of the company-specific risk be diversified away by investing in both Wrapped EETH and Toncoin at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Wrapped EETH and Toncoin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wrapped eETH and Toncoin, you can compare the effects of market volatilities on Wrapped EETH and Toncoin and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Wrapped EETH with a short position of Toncoin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wrapped EETH and Toncoin.
Diversification Opportunities for Wrapped EETH and Toncoin
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Wrapped and Toncoin is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Wrapped eETH and Toncoin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Toncoin and Wrapped EETH is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Wrapped eETH are associated (or correlated) with Toncoin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Toncoin has no effect on the direction of Wrapped EETH i.e., Wrapped EETH and Toncoin go up and down completely randomly.
Pair Corralation between Wrapped EETH and Toncoin
Assuming the 90 days trading horizon Wrapped EETH is expected to generate 2.92 times less return on investment than Toncoin. But when comparing it to its historical volatility, Wrapped eETH is 1.31 times less risky than Toncoin. It trades about 0.02 of its potential returns per unit of risk. Toncoin is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 243.00 in Toncoin on November 9, 2024 and sell it today you would earn a total of 133.00 from holding Toncoin or generate 54.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wrapped eETH vs. Toncoin
Performance |
| Timeline |
| Wrapped eETH |
| Toncoin |
Wrapped EETH and Toncoin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wrapped EETH and Toncoin
The main advantage of trading using opposite Wrapped EETH and Toncoin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wrapped EETH position performs unexpectedly, Toncoin can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Toncoin will offset losses from the drop in Toncoin's long position.| Wrapped EETH vs. Wrapped Beacon ETH | Wrapped EETH vs. Staked Ether | Wrapped EETH vs. Phala Network | Wrapped EETH vs. EigenLayer |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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